SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
03
September 2019
LLOYDS BANKING GROUP
plc
(Translation of registrant's name into
English)
5th Floor
25 Gresham Street
London
EC2V 7HN
United Kingdom
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports
under
cover Form 20-F or Form 40-F.
Form
20-F..X.. Form 40-F
Indicate
by check mark whether the registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes
No ..X..
If
"Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule
12g3-2(b):
82- ________
Index
to Exhibits
Item
No.
1 Regulatory News Service Announcement, dated 03 September
2019
re: Acquisition of Tesco Bank's Mortgage
Portfolio
3 September
2019
LLOYDS BANKING GROUP TO ACQUIRE TESCO BANK'S UK RESIDENTIAL
MORTGAGE PORTFOLIO
Lloyds Banking Group plc (the 'Group') announces today that Halifax
has entered into an agreement with Tesco Personal Finance plc
('Tesco Bank') to acquire Tesco Bank's prime £3.7 billion
UK residential mortgage portfolio.1
As part of the transaction, we welcome over 23,000 mortgage
customers who will be transitioning from Tesco Bank. Halifax has a
proven track record in serving and supporting mortgage borrowers
across the UK.
The transaction is consistent with Group strategy and value
accretive to shareholders.
As previously indicated, the Group's strong free capital build
gives us flexibility to consider inorganic growth opportunities in
selected target areas where we see value for shareholders. The
transaction is in line with this approach and demonstrates the
Group's strong commitment to the strategically core prime mortgage
market.
The acquired portfolio will generate good returns to the Group in
excess of current organic market opportunities, while delivering
open mortgage book growth within the Group's low risk strategy and
providing additional flexibility in participation choices in the
mortgage market. Following this transaction, we now expect the
Group's open mortgage book assets at the year end to be ahead of
the year end 2018 balance.
The purchase price of c. £3.8 billion represents a 2.5 per
cent premium on gross book value. 2 It
will be funded using existing internal resources with minimal
impact on capital (mid to high single digits basis points
at year end 2019). Under the ownership of Tesco Bank
the portfolio generated customer income of c. £81 million and
a pre-tax profit of c. £9 million in the year to 28 February
2019.
The beneficial ownership of the portfolio is expected to transfer
at the end of September 2019, with transfer of legal title
anticipated by the end of March 2020. We will work closely together
with Tesco Bank to ensure a smooth transition to the Group for all
customers.
1 Halifax
is a division of Bank of Scotland plc which is a wholly owned
subsidiary of Lloyds Banking Group
plc
2 There
will be an adjustment at legal close for in-flight customer loans
and further advances made to existing customers during the period
until legal title transfer which is likely to be less than £30
million
- END -
For further information:
Investor Relations
Douglas
Radcliffe
+44 (0)20 7356 1571
Group Investor Relations Director
Corporate Affairs
Matt
Smith
+44 (0)20 7356 3522
Head of Corporate Media
FORWARD LOOKING STATEMENTS
This
document contains certain forward looking statements with respect
to the business, strategy, plans and/or results of the Group and
its current goals and expectations relating to its future financial
condition and performance. Statements that are not historical
facts, including statements about the Group's or its directors'
and/or management's beliefs and expectations, are forward looking
statements. By their nature, forward looking statements involve
risk and uncertainty because they relate to events and depend upon
circumstances that will or may occur in the future. Factors that
could cause actual business, strategy, plans and/or results
(including but not limited to the payment of dividends) to differ
materially from forward looking statements made by the Group or on
its behalf include, but are not limited to: general economic and
business conditions in the UK and internationally; market related
trends and developments; fluctuations in interest rates, inflation,
exchange rates, stock markets and currencies; any impact of the
transition from IBORs to alternative reference rates; the ability
to access sufficient sources of capital, liquidity and funding when
required; changes to the Group's credit ratings; the ability to
derive cost savings and other benefits including, but without
limitation as a result of any acquisitions, disposals and other
strategic transactions; the ability to achieve strategic
objectives; changing customer behaviour including consumer
spending, saving and borrowing habits; changes to borrower or
counterparty credit quality; concentration of financial exposure;
management and monitoring of conduct risk; instability in the
global financial markets, including Eurozone instability,
instability as a result of uncertainty surrounding the exit by the
UK from the European Union (EU) and as a result of such exit and
the potential for other countries to exit the EU or the Eurozone
and the impact of any sovereign credit rating downgrade or other
sovereign financial issues; political instability including as a
result of any UK general election; technological changes and risks
to the security of IT and operational infrastructure, systems, data
and information resulting from increased threat of cyber and other
attacks; natural, pandemic and other disasters, adverse weather and
similar contingencies outside the Group's control; inadequate or
failed internal or external processes or systems; acts of war,
other acts of hostility, terrorist acts and responses to those
acts, geopolitical, pandemic or other such events; risks relating
to climate change; changes in laws, regulations, practices and
accounting standards or taxation, including as a result of the exit
by the UK from the EU, or a further possible referendum on Scottish
independence; changes to regulatory capital or liquidity
requirements and similar contingencies outside the Group's control;
the policies, decisions and actions of governmental or regulatory
authorities or courts in the UK, the EU, the US or elsewhere
including the implementation and interpretation of key legislation
and regulation together with any resulting impact on the future
structure of the Group; the ability to attract and retain senior
management and other employees and meet its diversity objectives;
actions or omissions by the Group's directors, management or
employees including industrial action; changes to the Group's
post-retirement defined benefit scheme obligations; the extent of
any future impairment charges or write-downs caused by, but not
limited to, depressed asset valuations, market disruptions and
illiquid markets; the value and effectiveness of any credit
protection purchased by the Group; the inability to hedge certain
risks economically; the adequacy of loss reserves; the actions of
competitors, including non-bank financial services, lending
companies and digital innovators and disruptive technologies; and
exposure to regulatory or competition scrutiny, legal, regulatory
or competition proceedings, investigations or complaints. Please
refer to the latest Annual Report on Form 20-F filed with the US
Securities and Exchange Commission for a discussion of certain
factors and risks together with examples of forward looking
statements. Except as required by any applicable law or regulation,
the forward looking statements contained in this document are made
as of today's date, and the Group expressly disclaims any
obligation or undertaking to release publicly any updates or
revisions to any forward looking statements contained in this
document to reflect any change in the Group's expectations with
regard thereto or any change in events, conditions or circumstances
on which any such statement is based. The information, statements
and opinions contained in this document do not constitute a public
offer under any applicable law or an offer to sell any securities
or financial instruments or any advice or recommendation with
respect to such securities or financial instruments.
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
LLOYDS
BANKING GROUP plc
(Registrant)
By: Douglas
Radcliffe
Name: Douglas
Radcliffe
Title: Group
Investor Relations Director
Date: 03
September 2019